CBS-Time Warner Cable fight invites football fans’ wrath

A major event like the Giants-Broncos game on Sept. 15 could be a catalyst. | AP Photos

“Consumers are caught in the crossfire, [they are] collateral damage in the dispute between these two companies,” she said in a statement. “Enough. If the parties can’t reach resolution, the FCC should use its ‘good faith’ authority under the law to help bring an end to this disagreement—and prevent long blackouts like this from happening again.”

Exactly what is “good faith” is something of an open question. In 2011 the commission opened a proceeding to determine if it needs to change the way it enforces the good faith requirement, but it has yet to issue new rules.

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For the agency to take direct action, one of the companies will have to file a complaint accusing the other side of acting in bad faith. Currently, the commission uses a seven-part test, with criteria including a party’s refusal to come to the bargaining table, stonewalling or giving one side a take-it-or-leave-it offer.

CBS is “demanding increases in the 100s of percentages, with not just with Time Warner Cable but other cable providers as well,” Time Warner Cable spokesperson Maureen Huff said. “Something has to change. It’s clear the system’s broken.”

CBS contends that Time Warner Cable is the exception rather than the rule. The network points to the retransmission deal it struck with Verizon’s FiOS, which was announced last week, as an example of successful negotiations.

CBS declined to comment, pointing to testimony by CBS Executive Vice President Martin Franks at the New York City Council earlier this month.

“Since 2006, when CBS became a standalone company, we have negotiated over 100 retransmission consent agreements without even a hint of public discord, much less having our channels dropped — until now,” he told the council’s consumer affairs committee.

Despite their increasing number, blackouts are still fairly uncommon, and when they do occur, they generally don’t last long. The CBS-Time Warner Cable standoff, which is dragging into a weeks-long ordeal, points to another emerging issue in television — digital rights.

As viewers move from watching shows when they air to watching them whenever they want, and companies like Netflix and Amazon.com become players in the TV market, broadcasters’ digital rights are becoming more important.

In the current dispute, CBS wants to sell the rights to programming like this summer’s hit “Under the Dome” to new players like Amazon, but Time Warner contends that it already is paying for rights that restrict the network’s ability to sell to someone else.

“Time Warner Cable appears to be trying to limit CBS’s ability to monetize its programming on different ‘over-the-top’ digital platforms like Amazon, Intel, and Netflix,” Smith explained. “Cable wants to be the exclusive gatekeeper, and CBS — like other broadcasters — wants to get its programming on as many platforms as possible.”

Government involvement in the sports industry, such as public financing for stadium construction, the NFL’s antitrust exemption and the retransmission consent law, gives regulators plenty of standing in such cases, said David Goodfriend, chairman of the Sports Fan Coalition and a lobbyist for DISH.

“American sports fans should start with: Where are my tax dollars going? How are democratically elected government officials playing into this system?” Goodfriend said. “It’s logical to say: ‘You can’t use my public resources to create a system that ultimately hurts me by taking games away.’”

CORRECTION: An earlier version of this article misstated the the nature of the rights Time Warner acquires from CBS. The rights are non-exclusive.